A few years ago, a group of WiFi-first MVNOs with a freemium model grabbed the headlines, in the US in particular, threatening to disrupt the MNOs because they could deliver cellular services with such a low cost base. But the start-ups, such as FreedomPop, Republic Wireless and Scratch, secured only a small part of the US market, and that tended to be among low-spending, scarcely profitable users. Indeed, the companies which are wielding WiFi-first disruptively are the cablecos, such as Comcast and Charter, since they have the wireline infrastructure, the established brands and customer bases, and the content partnerships to turn a low cost service into a full multiplay.
Quite quickly, the start-ups were looking to enhance their business model. Republic, for instance, moved into enterprise class WiFi Calling services and FreedomPop into global SIM offerings. Now, the latter is looking further into B2B revenue streams, launching a cloud-based platform that enables carriers or new providers to launch branded mobile offerings in a matter of weeks. This builds on its move, last year, into software-as-a-service and software licensing businesses which could prove more lucrative than the consumer freemium space.
The ‘Carrier in the Cloud’ idea extends the established concept of an MVNE by supporting providers on a software-as-a-service (SaaS) basis. This also looks ahead to the kind of platforms envisaged by Google and others, in which large numbers of MVNOs could access network capacity in an on-demand, dynamic basis, paying based on usage. This, combined with shared spectrum and, in future, network slicing techniques, could help to lower barriers to all kinds of service providers, in the same way that WiFi has, while creating an alternative power base to that of the MNOs – centered on the company controlling the cloud platform.
However, Freedompop is not talking primarily about enabling smaller providers which cannot afford long term, expensive and rigid MVNO agreements. It is initially appealing to larger firms, including telcos, which lack the agility to launch new mobile offerings quickly.
“What we hear time and again is that large companies lack the flexibility to test new mobile business models, brands and customer segments, and that’s at the heart of what we do,” FreedomPop CEO Stephen Stokols said in a statement. “The success we’ve had with our own business model has turned heads and made mobile executives eager to trial their own digital mobile services to disrupt their markets, grow their user base and increase revenues, so we built our ‘Carrier in the Cloud’ platform to allow them to deploy fully operative and innovative mobile brands, whenever and wherever they choose.”
Freedompop’s platform expands on its existing SaaS business which is based on its proprietary core monetization platform. This counts Wind Hutchison in Italy, Turk Telecom, Greek cableco Cyta, TruConnect and iWireless in the US, Virgin UAE, and Spain’s Masmovil as customers. The first public customer for the new service is satellite TV operator Dish Mexico, which will use the Freedompop system to power free mobile services to “millions of users”.
Last year, FreedomPop began licensing its original platform to companies looking to offer services through Lifeline, the US program to provide broadband access to low income consumers.
FreedomPop’s service launched in the US in 2012 and then expanded to the UK in 2015, operating as an MVNO on the 3UK network. Its freemium service offers free data, voice and text to users and pushes valued-added services for a small fee. Importantly to the low cost base, user connections default to WiFi, only using the cellular network when there is no good WiFI signal. This approach, pioneered by FreedomPop, Scratch Wireless and Republic Wireless, is also seen in the Google Fi multi-network MVNO – and it has led to some MNOs such as T-Mobile USA and Sprint to adopt the same tactics to ease the strain on their cellular networks.
Intel-backed FreedomPop has a partnership with Sprint in the US (which also looked at acquiring the start-up, but talks fell through), which has reportedly boosted the MNO’s low end subscriber base considerably and at low cost.